ACCOUNT NO. Balance Debit Credit ACCOUNT Work in Process-Baking Department Date

Question

ACCOUNT NO. Balance Debit Credit ACCOUNT Work in Process-Baking Department Date Item Debit Credit 1 Bal., 18,000 units, Vs completed 31 Direct materials, 336,000 units 31 Direct labor 31 Factory overhead 31 Goods finished, 330,000 units 31 Bal, 2 units, completed 14,760 266,760 306,760 367,290 346,410 20,880 20,880 Mar. 252,000 40,000 60,530 a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent. 1. Direct materials cost per equivalent unit. 2. Conversion cost per equivalent unit. 3. Cost of the beginning work in process completed during March. 4. Cost of units started and completed during March. 5. Cost of the ending work in process b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 18,000 Add: Units Started in Process 336,000 Total Units to account for: 354,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 18000 Units started and completed 312,000 Ending Work in Process 24,000 Total Units to be accounted for: 354,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 75% 13,500 Units started and completed 100% 312,000 100% 312,000 Ending Work in Process 100% 24,000 40% 9,600 Total Equivalent units 336,000 335,100 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 252,000 100,530 Equivalent Units 336,000 335,100 Cost per Equivalent unit 0.75 0.3 TOTAL COST ACCOUNTED FOR: Units Completed from Beginning WIP (18000 units) Equivalent unit Cost per EU Total Cost Beginning Cost 14760 Material 0 0.75 0 Conversion Cost 13,500 0.3 4050 Cost of units completed from Beg WIP 18810 Units started and Transferred out (312,000 units) Equivalent unit Cost per EU Total Cost Material 312,000 0.75 234000 Conversion Cost 312,000 0.3 93600 Total Cost of Units completed and transferred out: 327600 Ending Work in process (24,000 units) Equivalent unit Cost per EU Total Cost Material 24,000 0.75 18000 Conversison Cost 9,600 0.3 2880 Total cost of Ending Work in process: 20,880 Note: It has been assumed that the material is added in the beginning of the process Req A: 1. Direct material per unit:     $ 0.75 per unit 2. Conversion costperr unit: $ 0.30 per unit 3. Cost of Beginning WIP completed : $ 18810 4. Cost of units started and completed : $ 327600 5 Cost of ending inventory of WIP : $ 20,880 Req B: Conversion equivalent units completed in Beg WIP lasst month(18000*25%) 4500 units Total cost of Beginning WIP 14760 Less: Material cost 13500 (18000 units @$0.75) Conversion cost in Beg WIP 1260 Divide: Equiv Units of conversion 4500 Conversion cost per unit last month 0.28 Conversion cost has been increased this montth

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